TUCSON (CN) — As the world's largest publicly traded uranium company goes to trial on tax evasion charges in Canada, a legal battle to secure the testimony of a former employee of Cameco Corp. plays out in Arizona.
The Tax Court of Canada issued an order to subpoena Marlene Kerr, of Green Valley, Ariz., to provide testimony via videoconference in a trial that accuses the Saskatchewan-based company of dodging billions of dollars in taxes.
But Toni Hellon, Pima County Superior Court clerk, objected, and a lawsuit was filed against her.
Stephen M. Weiss, a Tucson attorney hired by the Canadian government, said he filed the Sept. 29 complaint after the court rejected his client's domestication action.
"What you have to do in that kind of case is get the Canadian order domesticated, in other words, approved by the Arizona court," Weiss said. "Once they do that, I can get an Arizona subpoena issued."
Hellon could not be reached for comment, but the lawsuit states that "acting through her deputies," she refused to accept the domestication action so that an Arizona subpoena could be issued.
The argument appears to be unclear, as the complaint states that Hellon cited Arizona Rules of Civil Procedure: "that the plaintiff 'present a "foreign subpoena" to a clerk of the court in the county in which discovery is sought to be conducted in this state.'"
Weiss said that requirement applies only when seeking approval of an order from another state, not a foreign nation.
"The defendant's refusal to accept the domestication action for filing constitutes a failure to perform a duty required by law, i.e., to aid and promote the judicial process," the complaint states.
The lawsuit, "In Re the Matter of Her Majesty the Queen vs. Toni Hellon," asks that the Pima County Superior Court issue a writ of mandamus to the clerk and require her to accept it for filing the domestication action.
Calls to the Attorney General's Office, which represents the court clerk, were not returned.
Kerr's Phoenix attorney, Mary Ellen Simonson, said she didn't know "whether the court has issued a subpoena or whether there's still a dispute."
Kerr is scheduled to testify the second week of December, but need not travel to Toronto for the trial. Her video testimony is to be taken at Weiss's office.
Kerr was a member of Cameco's marketing team and worked in Europe, according to information from an industry nonprofit, Environmentalists for Nuclear Energy.
The Canadian Revenue Agency accuses the $2.8 billion company of avoiding taxes for years through its subsidiary in Switzerland, a well-known tax haven.
Cameco, which has denied wrongdoing, also faces scrutiny by the Internal Revenue Service. The IRS seeks to collect $32 million from the company in back taxes for 2009 and is auditing tax returns through 2012.
"If the IRS audits years subsequent to 2012 on a similar basis, we expect these adjustments would also be similar to those proposed for 2009," Cameco says on its website.
As the Canadian tax trial continues into next year, it's likely to bring to the forefront the widespread corporate practice of offshore tax avoidance by companies from all over the world. In April, a study by the charity Oxfam found that multinational companies cost countries up to $240 billion each year this way.
In the United States alone, the biggest 50 companies — including global brands such as Pfizer, Goldman Sachs, Dow Chemical, WalMart and IBM — have more than 1,600 subsidiaries in tax havens, the study found.
"The revelations come in the wake of the Panama Papers scandal that, once again, revealed how powerful individuals and companies are using tax havens to hide their wealth and dodge taxes," the report concluded.
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